Kuwait City: The International Monetary Fund (IMF) staff and the Ukrainian authorities have reached a staff-level agreement on the Eighth Review of the four-year, USD 15.5 billion Extended Fund Facility (EFF) Arrangement. Subject to approval by the IMF Executive Board, this agreement would grant Ukraine access to approximately USD 0.5 billion, amounting to 0.37 billion in Special Drawing Rights (SDR), and bringing the total disbursements under the program to USD 10.65 billion.
According to Kuwait News Agency, all end-March quantitative performance criteria and indicative targets have been met, and understandings were reached on a set of policies and reforms to sustain macroeconomic stability. The structural reform agenda is progressing with two structural benchmarks met, another expected to be completed soon, and strong commitments to advance other key reforms. The outlook remains uncertain as the ongoing war continues to impact the population, economy, and infrastructure. Despite these challenges, the program remains on track and fully financed due to large-scale external commitments.
An IMF team led by Mr. Gavin Gray held discussions with Ukrainian authorities in Kyiv from May 20-27 regarding the Eighth Review of the EFF Arrangement. Upon concluding the discussions, Gray noted that the agreement is subject to the approval of the IMF Executive Board, with consideration expected in the coming weeks. He highlighted that Ukraine's four-year EFF Arrangement continues to provide a strong anchor for the country's economic program amidst high uncertainty.
Gray stated that the Ukrainian economy remains resilient despite over three years of war. Real GDP growth is expected to remain modest at 2-3 percent for 2025 due to labor constraints and damage to energy infrastructure. Inflation has risen to 15.1 percent year-on-year in April, mainly due to increasing food and labor costs, though inflation expectations remain anchored. The National Bank of Ukraine has raised the policy rate by a cumulative 250 basis points since December in response to these challenges. Gross international reserves reached USD 46.7 billion as of the end of April, reflecting continued large external official support. However, risks remain high due to the ongoing uncertainty of the war and prospects for peace and recovery.